July 3, 2009 / 9:27 PM / 10 years ago

G8 united in not shifting reserve currencies-source

(This story is without a dateline to protect the identities of the sources)

July 3 (Reuters) - The Group of Eight leading industrialized nations are showing little enthusiasm for China’s idea of questioning the dollar’s status as the main global reserve currency, a G8 source involved in preparations for next week’s G8 summit said on Friday.

“There is pretty broad consensus with the G8 that this is not the time to experiment with reserve currencies, however attractive it might seem,” said the source, speaking on condition of anonymity.

G8 sources said earlier this week that China had asked for discussion of proposals for a new global reserve currency at next week’s G8 meeting in Italy, which will be expanded on the second day to include China and other emerging nations.

The reserve currency debate centres on proposals by some emerging powers that an alternative should be found to the dollar as the main global reserve currency, to reflect the shifting balance of power in the globalised economy.

China has been particularly vocal. It holds more U.S. Treasury debt than any other country and has expressed fears that Washington’s huge spending on economic stimulus could spark inflation, hurting the value of China’s dollar-denominated reserves. (Reporting by Reuters bureaux)

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